What is the significance of the proposed effective date of the transfer for Big Blue Swim School?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
est in you or in an Entity owning a controlling ownership interest in you, then we will not unreasonably withhold our approval of a proposed transfer meeting all of the following conditions (provided, however, there may be no such transfer until after the School has opened for business):
(a) on both the date you send us the transfer request and the transfer's proposed effective date: (i) the transferee and its direct and indirect owners have the necessary business experience, aptitude, and financial resources to operate the School, (ii) the transferee otherwise is qualified under our then-existing standards for the approval of new franchisees or of existing franchisees interested in acquiring additional franchises (including the transferee and its affiliates are in substantial operational compliance, at the time of the application, under all other franchise agreements for BIG BLUE Swim Schools to which they then are parties with us), and (iii) the transferee and its owners are not restricted by another agreement (whether or not with us) from purchasing the School or the ownership interest in you or the Entity that owns a controlling ownership interest in you;
(b) on both the date you send us the transfer request and the transfer's proposed effective date, you have paid all required Royalties, Software License Fees, Brand Fund contributions, MSC Fees, and other amounts owed to us and our affiliates relating to this Agreement and the School, have submitted all required reports and statements, and are not in breach of any provision of this Agreement or another agreement with us or our affiliates relating to the School;
(c) on both the date you send us the transfer request and the transfer's proposed effective date, neither the transferee nor any of its direct or indirect owners or affiliates operates, has an ownership interest in, or performs services for a Competitive Business;
(d) before or after the transfer's proposed effective date (as we determine), the transferee's management personnel, if different from your management personnel, satisfactorily complete our then-current Initial Training;
(e) the transferee has the right to occupy the School's site for the expected franchise term;
(f) before the transfer's proposed effective date, the transferee and each of its owners (if the transfer is of the franchise rights granted by this Agreement), or you and your owners (if the transfer is of a controlling ownership interest in you or in an Entity owning a controlling ownership interest in you), if we so require, sign our then-current form of franchise agreement and related documents (including a Guaranty and Assumption of Obligations), any and all of the provisions of which may differ materially from any and all of those contained in this Agreement, provided, however, that (i) the term of the new franchise agreement signed will equal the unexpired portion of this Agreement's Term, (ii) the Royalty, Software License Fee, and Brand Fund contribution levels specified in this Agreement will be substituted into the then-current form of franchise agreement that you sign for the balance of the initial franchise term (i.e., the unexpired portion of the Term), and (iii) the Area of Protection defined in this Agreement will be substituted into the then-current form of franchise agreement that you sign for the balance of the initial franchise term (i.e., the unexpired portion of the Term);
(g) before the transfer's proposed effective date, you or the transferee pays us a transfer fee equal to Twenty-Five Thousand Dollars ($25,000);
(h) before the transfer's proposed effective date, the transferee agrees to repair and/or replace Operating Assets and upgrade the School in accordance with our then-current requirements and specifications for new BIG BLUE Swim Schools within the timeframe we specify following the transfer's effective date;
(i) before the transfer's proposed effective date, you (and your transferring owners) sign a general release, in a form satisfactory to us, of any and all claims against us and our affiliates and our and their respective owners, officers, directors, employees, representatives, agents, successors, and assigns;
(j) we have determined that the purchase price, payment terms, and required financing will not adversely affect the transferee's operation of the School;
(k) if you or your owners finance any part of the purchase price, you and they agree before the transfer's proposed effective date that the transferee's obligations under promissory notes, agreements, or security interests reserved in the Operating Assets, the School, or ownership interests in you are subordinate to the transferee's (and its owners') obligation to pay Royalties, Software License Fees, Brand Fund contributions, MSC Fees, and other amounts due to us and our affiliates and otherwise to comply with this Agreement;
(l) before the transfer's proposed effective date, you and your transferring owners (and members of their Immediate Families) agree, for the applicable timeframe beginning on the transfer's effective date, not to engage in any activity proscribed in Sections 20.E and 20.F below; and
(m) before the transfer's proposed effective date, you and your transferring owners agree not directly or indirectly at any time afterward or in any manner (except with other BIG BLUE Swim Schools you or they own or operate) to: (i) identify yourself or themselves in any business as a current or former BIG BLUE Swim School or as one of our franchisees; (ii) use any Mark, any colorable imitation of a Mark, any trademark, service mark, or commercial symbol that is confusingly similar to any Mark, any copyrighted items, or other indicia of a BIG BLUE Swim School for any purpose; or (iii) utilize for any purpose any trade dress, trade name, trademark, service mark, or other commercial symbol suggesting or indicating a connection or association with us.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Big Blue Swim School Franchise Disclosure Document, the proposed effective date of a transfer is a critical point in the transfer process, with several conditions that must be met both before and on that date.
Prior to the proposed effective date, Big Blue Swim School must determine that the purchase price, payment terms, and financing will not negatively impact the transferee's ability to operate the swim school. The transferring party must also ensure that if they finance any part of the purchase, the transferee's obligations to Big Blue Swim School (such as royalty, software, and brand fund fees) take priority over any promissory notes or security interests. Furthermore, before this date, the transferring owners must agree to refrain from engaging in activities that would violate non-compete and confidentiality agreements, and they must not identify themselves as a Big Blue Swim School franchisee in any future business ventures (unless those ventures are other Big Blue Swim School franchises).
On the date the transfer request is sent and on the proposed effective date, the transferee must demonstrate the necessary business experience, aptitude, and financial resources to operate the Big Blue Swim School. They must also meet Big Blue Swim School's standards for new franchisees and not be restricted by any other agreements from purchasing the school. The transferring franchisee must have paid all outstanding fees and be in full compliance with the franchise agreement. The transferee cannot operate or have an interest in a competitive business. The proposed effective date therefore serves as a checkpoint to ensure all financial, operational, and legal obligations are met before the transfer is finalized, protecting the integrity of the Big Blue Swim School brand and franchise system.
Before the proposed effective date, the transferee may need to complete initial training, sign the current franchise agreement (which may have different terms), pay a $25,000 transfer fee, agree to upgrade the school, and sign a general release of claims. These stipulations ensure that the transferee is fully prepared and committed to upholding Big Blue Swim School's standards and practices. The effective date essentially marks the point at which the new franchisee assumes responsibility for the Big Blue Swim School, and all necessary preparations must be completed beforehand.